Estée Lauder reports 8% sales drop in fiscal year 2025
These results reflect a challenging market environment with declining sales and profitability.
USA – Estée Lauder has reported a challenging fiscal year 2025 marked by an 8% drop in sales, falling to USD 14.326 billion, and a significant net loss of USD 1.133 billion.
This performance continues a three-year decline trend, primarily driven by socio-economic pressures and weakening consumer demand, particularly in the United States and China, which are its key markets.
The company’s skincare category remained its top-selling segment with revenue of USD 7.0 billion, though it declined 12% compared to the previous year.
Makeup sales, affected mainly by slower performance from the MAC brand, totalled about USD 4.3 billion, while fragrances remained steady at USD 2.49 billion.
Hair care sales further declined to USD 565 million.
Regionally, the U.S. and Latin America led with sales around USD 4.41 billion, followed by Europe, Korea, and the Middle East at USD 3.57 billion, Asia Pacific at USD 3.6 billion, and mainland China at USD 2.74 billion.
CEO Stéphane de La Faverie acknowledged the difficult three consecutive years of sales declines but expressed cautious optimism, noting, “Having closed fiscal 2025 as expected, we remain wholly focused on continuing to execute our strategic vision of Beauty Reimagined with excellence.”
Estée Lauder also faces challenges such as tariff-related cost pressures, which it estimates could reduce profits by about USD 100 million over the next year.
To counter this, it has initiated measures including job cuts (around 3,200 employees), cost reduction efforts, organizational restructuring, and a focus on product innovation and expanding sales channels beyond traditional department stores.
Despite the overall downturn, Estée Lauder has reported gains in market share in key regions such as mainland China, Japan, and the U.S., buoyed by strong performances from brands like La Mer, TOM FORD, The Ordinary, Clinique, and Jo Malone London. Travel retail, once a significant sales driver, has diminished significantly, now accounting for just 15% of total sales.
The company forecasts fiscal 2026 revenue of around USD 14.69 billion and anticipates adjusted EPS growth of between 26% and 39%, aiming for a return to sales growth and operating profitability after the recent slump.
Stéphane said, “Despite continued volatility in the external environment, we embarked on fiscal 2026 with signs of momentum and confidence in our outlook to deliver organic sales growth this year after three years of declines and to begin rebuilding operating profitability in pursuit of a solid double-digit adjusted operating margin over the next few years.”
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